Venezuela's president blames soaring inflation on 'parasitic bourgeoisie,' deploys army to force stores to slash prices

Throngs of Venezuelans stood in lines outside appliance stores for a fourth day on Monday after President Nicolas Maduro deployed the army to force retailers to slash prices.

After taking control of several appliance stores last week, Maduro vowed late Sunday to step up inspections of businesses selling shoes, clothes, automobiles and other goods to make sure they aren’t gouging consumers. He also said he’ll impose limits on profits as the government tries to curb inflation running at 54 per cent.

In eastern Caracas, a five-block line of bargain hunters, some waiting since Saturday, snaked from a JVG electronics store hoping for the chance to buy televisions, washing machines and refrigerators at deep discounts.

“We’ve been waiting for this for a long time,” said Sixto Mesa, a government supporter.

Maduro is gambling that by expanding price controls he can regain support he has lost since winning election in April, as inflation soared to a two-decade high and the U.S. dollar shot up on the black market to nine times its official value.

We can’t just close the businesses; the owners have to go to jail

Analysts said the measures might bolster government candidates in next month’s mayoral elections, but warned that the tougher rules are likely to inflict more damage on Venezuela’s economy by discouraging investment and adding to shortages that reached a record level in October.

“We can’t just close the businesses; the owners have to go to jail,” Maduro said in an impassioned speech Sunday night in which he cited Jewish, Muslim and Christian texts to harangue businessmen he accuses of usury. “We can’t allow our hard currency to be used to rob people through the sale of these goods.”

At the same time Maduro is attacking merchants he calls the “parasitic bourgeoisie,” he has vowed zero tolerance for looting. On Monday, police fired shots in the air to prevent crowds from raiding a toy store in the Caracas suburb of Los Teques, with many businesses in the town shuttering early for fear of violence.

Maduro also took his offensive to the Internet, blocking access to seven websites that track the value of the country’s bolivar currency on the black market. The president over the weekend accused the websites of spreading panic and conspiring against his government.

Free-market economists say the only way to stabilize the economy is to lift capital controls put in place a decade ago by the late President Hugo Chavez and to devalue the bolivar.

That’s a notion Maduro rejects.

The president argues that Venezuela’s inflation is the result of hoarding and speculation by his opponents in Venezuela and in the U.S. He says the country, which is South America’s biggest oil producer, has more than enough dollars to pay for imports.

If not for the “economic war” being waged by his opponents, inflation should be running around 16 per cent to 18 per cent, Maduro said Sunday night.